Massachusetts Mortgage Licensing

Massachusetts Mortgage Licensing

Massachusetts currently is the most difficult state to obtain a Mortgage Lender License. They will look at many things not mentioned on their application. This includes:

Financials – They will review your company financials to make sure you haven’t had any net losses. If you are very new company and had large expenses to set up your company, they will deny your application even if you show a very strong net worth and business plan for future growth. So it is best to apply immediately after forming the company before there are any expenses, or wait until you have a positive net income to apply.

Warehouse Line Capacity – They will review to make sure your warehouse lines are large enough to handle the volume of loans you are closing and anticipate closing once you obtain your MA License. This determination is very arbitrary (Based on random choice or personal whim, rather than any reason or system).

Management Capacity – They will review to make sure you have enough “management” to create and implement company policy. They will often ask for you to add additional “management” as control persons in the direct owner/executive officer section of the NMLS which forces you to report these individuals as executive officers to all other states you may be licensed in. This determination is very arbitrary (Based on random choice or personal whim, rather than any reason or system).

Experience For Qualifying Individual – Although the application only requests verification of experience for the person designated as the qualifying individual, I have also seen them arbitrarily require control persons of the company (Direct Owners/Excutive Officers) that are not the qualifying individual to also verify experience.

Mortgage Call Reports – They will review the NMLS Mortgage Call Reports filed by your company in other states very closely and require them to be updated if there are any errors. This includes balancing of Application Data, Closed Loan Data and MLO Data, and balancing of Application Data in process at the end of each quarter and the beginning of the next quarter. They will require you to fix any errors.

Disclosure Questions – They will review disclosure questions very carefully. Any disclosure questions answered incorrectly will result in denial whether it was a mistake or intentional. And I have yet to see anyone intentionally falsify a disclosure so these are all situations where something was mistakenly not disclosed. Disclosure questions often missed are questions regarding regulatory actions from other states for your company or any company’s that the Control Persons (Direct Owners/Executive Officers) previously owned or controlled.

Out-of-State Examinations – They will review state examinations from other states your company is licensed in. If any orders were issued by the other state(s), no matter how minor the violations, they will deny your application.

In-State Examinations – If your company currently holds a MA Mortgage Broker License, they will review the results of your last examination. If it was given a rating of 3 or worse then they will deny your application.

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Disclosure

Information herein is for educational purpose only and is not meant to be a complete statement of all state mortgage licensing requirements. Additional State and FHA mortgage licensing requirements may be required. If you need further information, we would encourage you to contact us directly.